Wednesday, October 3rd, 2012
Augusta, GA
By Al Gray
*Editor's Note: Click on highlighted text links to view documents referenced in this report*
In the five-year twisting tale of
Augusta's TEE Center project, we who have observed the events and decisions as
they happened, learned to expect the unexpected. This didn't keep reporter Susan
McCord's tweet
from the September 24, 2012 Augusta Commission meeting from astounding
me.
“Paul Simon: If documents aren't approved by Oct. 15, (we) will have
to cancel January police chiefs convention at TEE center,” she typed.
My jaw dropped at the audacity of the city's Tee Center partner suddenly
resorting to what looks like a shakedown to get a management deal approved.
Simon's Augusta Riverfront LLC is
getting a $2 million a year subsidy courtesy of an unsigned, undated proposal
from 2007 and that isn't enough for him and his partners at Augusta Riverfront
LLC? Augusta has been held hostage since
then. What is worse is that the City Administrator, legal counsel, and Augusta
Convention and Visitors Bureau might be the source of this clumsy, heavy handed
way of extorting an agreement out of a suddenly reluctant Commission.
It is impossible for me as an Augusta
Richmond County citizen to accept this assault by Management Agreement on the
city's finances in silence.
·
Augusta built at least $50 million in
new buildings across multiple parcels owned by this Riverfront organization and
probably $20 million of existing buildings, yet now is held hostage to liens on
some of them?
·
There will be hundreds of pages of
recorded easements, cross easements, assignments, and agreements on these
lands, meaning that Augusta has all of the costs of land ownership, but few of
the packages of rights that come with land ownership. Can't we at least get a
fee in lieu of taxes?
·
The unsigned,
undated partnership agreement from 2007 says throughout that Riverfront is responsible for kitchen
equipment while saying that Augusta is responsible for the kitchen space.
Augusta has not been able to show where its City Commission has ever voted to
change the partnership agreement, only that Augusta approved the change order
to add $1.4 million of equipment to a project that Riverfront agreed to
participate in as a builder and operator. Where is Augusta's money?
·
The September 24 meeting was the first
the Commission as a body had seen of the catering or management agreements and
they were presented with an ultimatum that the documents have to be approved
within 22 days! Five years of dithering and now the people of Augusta are
presented with a manufactured emergency? Why? Keep reading!
·
Can we say there might be C-O-N-S-P-I-R-A-C-Y
within Augusta government? Darryl Leach was the General Manager of
the Augusta Marriott.On September 24, Paul Simon announced
the Tee
Center is now the AUGUSTA CONVENTION CENTER.The
agreements that Augusta has been commanded to execute are now with an entity
called the Augusta Convention Center Management LLC. This is where things get really get good. Darryl Leach is now the General Manager of
the Augusta Convention Center. In
fact, it seems nearly all of the former Marriott Augusta Staff, Don Fuller, Janet Pierce
, Greg DeSandy
and Sharon
Koon, are now on the Augusta
Convention Center Team! Who gets to decide
if all, any or part of these employees – whose salaries and fringe benefits
likely exceed a million dollars – who used to be Marriott costs become Augusta
costs? The Management
Agreement says the Augusta Convention Center Management LLC “...
shall have discretion and control, free from interference, interruption or
disturbance, in all matters relating to management and operation of the TEE
Center” and “Manager shall select, employ, promote, terminate where
appropriate, supervise, direct, train, and assign the duties of all personnel
which Manager reasonably determines to be necessary or appropriate for the
operation of the TEE Center” This Management agreement and the catering
agreement provide capability for 100% of former Marriott employees to shift
onto the Augusta payroll! It sure looks like Augusta will have no rights to
contest this cost shift once this agreement is executed
(*article continues below)
The Augusta Convention Center
(*article continues below)
The Augusta Convention Center
·
Consultation with the Georgia Secretary
of State Corporations
Division does not show Augusta Convention
Center Management LLC as being registered to do business in Georgia. Augusta is
being demanded to execute an agreement with an entity that does not yet exist?
·
Augusta is forced to deposit $250,000
at the beginning of the year into the operating account, but if the balance in
that account falls below the amount to fund that account for the next 90 days,
Augusta is required to contribute from GENERAL REVENUES enough funding to meet
those expenses without regard to how soon the next $250,000 funds injection is
required!!!!! The original partnership
agreement limits Augusta funding requirements to
$250,000 for operations and $100,000 for capital, yet this management agreement
calls for an unlimited pipeline of funding from Augusta? Who authorized or
negotiated that?
·
The unlimited ability of this Augusta Convention Center Management LLC to
establish what costs are is not limited by the Annual Plan that the Augusta
Commission approves, because “the Annual Plan will be only a planning tool.”
Also, shouldn't references to any Annual Plan limits be clearly defined not
just as the types of costs to be included, but the amounts as well?
·
The management agreement provides for
annual audits only, with no real-time or even monthly reporting. How can
Augusta monitor these cost reimbursable agreements without continuous reporting
and the strongest of audit rights? Shouldn't these agreements be made subject
to open records requests? Maybe the Augusta Chronicle can help us! No?
·
The management agreement called for the
CVB to begin marketing for the Convention Center with execution of the
construction contract to the tune of $350,000. However, the
use of these funds by the CVB to market the Center before it opens was against
the city's own ordinance.
Summary
The Tee Center management agreement
looks to have morphed into an agreement that allows most of the administrative
staff of the Augusta Marriott to be shifted to Augusta's Conference Center
expense. There are unexpected liens on some of the property under the Center
and a parcel that was not liened never was conveyed prior to construction. The
Augusta Administrator promised the agreement was nearly complete over 3 years
ago and now has provided the city commission with just 22 days to review and
approve the contracts. The entity that Augusta is contracting with may not
exist yet. The operating expenses, capped by the 2007 partnership agreement,
are now unlimited conduits to the general funds of the city. The contracts fail
to provide real-time program management and accounting.
***************
The Augusta Commission should walk away
from these agreements and put the management and catering agreements out for
bid. Otherwise outside counsel from far outside of Augusta needs to be brought
in to renegotiate the management agreement to conform to model contracts from
other cities.
Beyond this, it looks to me that
Commissioner Bill Lockett's idea of a forensic audit or a county-funded
investigation of these transactions needs to be revisited. The project was
funded by sales taxes, there are ample unused sales tax revenues in the coffers
of Augusta, and legal costs are legitimate uses of sales tax money.
Can all of these issues and the
progression toward the renaming of the TEE Center as the Augusta Conference
Center be just incompetence?
Can Augusta afford an unlimited
pipeline to its general revenues?
I don't think so.***
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